New York has sued Polymarket, alleging its US prediction market operates as an unlicensed gambling business across the state. On September 24, Attorney General Letitia James filed a petition in New York state court against QCX LLC, which operates as Polymarket US, seeking an injunction, restitution, and substantial penalties.
The lawsuit challenges how Polymarket's event contracts function. Users purchase contracts tied to future event outcomes, with payouts determined by whether specified events occur. New York argues that because customers risk money on outcomes beyond their control, these transactions constitute gambling under state law. The state characterizes Polymarket as offering "quintessentially wagering" despite operating without a license from the New York State Gaming Commission.
Governor Kathy Hochul stated: "Calling it a 'prediction market' doesn't change the facts. If you're taking bets in New York, our gambling laws apply."
Marketing and Sports Wagering Claims
The petition cites Polymarket's marketing practices as evidence of illegal operations. The company announced its US app in December 2025 with promises of "sports—followed by markets on everything" and advertised itself as "legal in all 50 states." An earlier promotion stated users could "TRADE EVERY FOOTBALL GAME IN ALL 50 STATES."
Investigators identified markets involving the New York Mets, college football games, the New York governor's race, and reality television programming. The state alleges Polymarket repeatedly advertised and solicited users in New York through the internet and social media.
New York requires mobile sports wagering operators to hold a state license, which Polymarket lacks. The petition also alleges violations of the federal Wire Act through transmission of sports wagers and related communications across state lines.
Age Requirements and Regulatory Gap
The complaint highlights an age restriction discrepancy. Polymarket allows users aged 18 and above, while New York requires mobile sports bettors to be at least 21. The state is asking the court to prohibit Polymarket from allowing people under 21 to wager on event contracts.
Attorney General James argued that unlicensed operators bypass safeguards and taxes imposed on licensed gaming companies, stating: "By skirting New York's laws, Polymarket is targeting the most vulnerable and depriving New York families of critical services and support." The state notes that gambling tax revenue supports schools, youth programs, and problem gambling treatment.
Requested Remedies
New York seeks a permanent injunction preventing Polymarket from operating an unlicensed gambling business within or from New York. The requested order would cover contracts tied to sports, culture, elections, and other events, as well as advertising and marketing of these contracts.
The state also seeks customer accounting identifying clients and itemizing bets placed, customer losses, and company gains. Remedies include full customer restitution, damages, and disgorgement of alleged illegal proceeds.
New York is seeking penalties equal to three times Polymarket's gains from the alleged violations. Additionally, the petition seeks $100,000 for each offering or attempt to offer unauthorized sports wagering within or from New York, though the total potential penalty remains unspecified pending investigation of how many offers qualify.
Broader Pattern of Enforcement
This lawsuit follows similar actions by New York against other prediction market operators. In April, the state sued Coinbase Financial Markets and Gemini Titan over prediction markets involving sports, elections, and entertainment events. In July, New York filed a lawsuit against Kalshi, another prediction market operator, seeking comparable remedies.
The Kalshi case had already tested the boundary between federal derivatives regulation and state gambling enforcement. Earlier in July, Attorney General James and Governor Hochul stated that Kalshi had lost its lawsuit against the New York Gaming Commission and pledged to continue applying state gambling laws to prediction markets.
Notably, Polymarket holds status as a Commodity Futures Trading Commission (CFTC)-designated contract market as of July 2025, placing the New York lawsuit within a broader dispute over how federal derivatives oversight interacts with state gambling laws.
